Robert D. Parmet: Review of Eric Laursen's "The People's Pension: The Struggle to Defend Social Security Since Reagan" (AK Press, 2012)

Robert D. Parmet is professor of history at York College of the City University of New York.

In 1964 Barry Goldwater discovered that suggestions to reduce or replace Social Security can be politically hazardous. Twelve years later Ronald Reagan lost the Republican presidential primary election in Florida in part because he attacked Social Security. Nevertheless, the assaults persisted, and since Reagan’s election in 1980 have become increasingly sophisticated and intense. In more than seven hundred pages of text, Eric Laursen describes these efforts in great detail, presenting the provisions of proposed legislation, the campaigns to substitute alternate retirement schemes, and the coalitions of politicians, businessmen, and financiers who to the present day have sought to subvert the landmark social legislation of the New Deal. With Social Security and Medicare major issues in this presidential year, this book provides the background for anyone who wishes to be well-informed.

Laursen is a journalist and activist who spent fifteen years researching Social Security and writing about it for various publications. He is not neutral, noting that it “has been by far the largest income support program in the U.S. and a necessity for the 95 percent of American workers who participate in the above-ground economy” and “For seventy years, it has been a fundamental element of American workers’ lives,” one of the programs to which middle-class Americans “owed their prosperity.”

Their welfare is his primary concern. Invariably, when discussing criticism of Social Security as a deficit buster or “entitlement,” or a program that would be improved by privatization, Laursen points out the vulnerability of those whom it serves. For example, such is the case with African Americans, whom critics of Social Security claim do not receive proportionate retirement benefits because of poor longevity. They do, however, receive significant disability benefits.

The alleged evils of Social Security exceeded mere expense. In the ideological warfare against it, critics created “entitlements” as a “catchall term” to serve a conservative agenda and give the program “a hint of illegitimacy.” In 1980 Business Week complained that entitlements undermined economic growth. Five years later, Paul Hewitt, a Republican Senate staff director, founded Americans for Generational Equity, which had another complaint that Social Security created generational conflict. Overgenerous benefits to the elderly would jeopardize future payments to the young. Peter Peterson, former Secretary of Commerce under Richard Nixon, an articulate proponent of this viewpoint, was another leader of this group. Soon the projected victims of the Social Security shortfall received a name. Born after 1964, they were identified as Generation X, but they allegedly “had the talent and the temperament for privatized Social Security,” which they were urged to endorse.

The war against Social Security has indeed been waged on many fronts. Among the foremost has been the allegation that it was out of control and headed for bankruptcy. Evidently less interested in saving than scuttling it, the Cato Institute sponsored a Project on Social Security Privatization. In a particularly competitive mood during the 1990s, Wall Street utilized the concept to sell mutual funds and other alternatives. To lure people from Social Security by converting them into investors, Laursen observes, Citigroup had an “array of financial products and its army of salespeople.” Americans would do more than just retire in comfort. They would get rich.

The army waging what Laursen calls “the war against the geezers” has not included strictly partisan troops. Fearful that the cost of Social Security would ultimately compel taxes to be raised, “a small but influential caucus of center-right Democratic deficit hawks,” including Daniel P. Moynihan, Joseph Lieberman, and occasionally Bill Clinton, joined the Republicans, who saw this alliance with Democrats as their best means of phasing it out. Bipartisanship, we are reminded, is not always enlightened.

With considerable care, Laursen chronicles this continuing struggle, including the efforts of congressional Democrats such as Harry Reid and Nancy Pelosi to withstand the conservative pressure on Social Security. In general, progressive Democrats have successfully repulsed the attacks, but they continue, and extend to Medicare, the health program for seniors. It “is a political tinder box,” The Economist complains, “popular” and backed by “powerful” advocates, but “unaffordable.”

Laursen would like to witness a broad progressive coalition emerge to protect the social insurance introduced by the New Deal. Skeptical that the American middle class can afford to realize the conservative dream of an “ownership society,” or that Washington in the present political and economic climate will produce a progressive alternative, he thinks “the next step ... might be a return to mutual aid,” where “working households would have to work together.”

Behind his rather gloomy outlook is his acknowledgement of the circumstances that initially produced Social Security. He notes that it resulted from the devastation of the Great Depression and “a deep desire for social renewal.” Without such conditions today, and with a president who appears to have abandoned the activists who had helped elect him in 2008, he feels that there is little chance for government action to strengthen the system, despite recent signs of public protest against social injustice. However, what is most depressing, and what Laursen amply demonstrates, is that the plans to deal with Social Security since 1980 have usually been devised for purposes other than genuine social insurance, and not especially mindful of those in society who are most in need.